Hubris Unbound

Hubris Unbound

See also Tim Shorrock’s March 2002 story for The Nation on the Carlyle Group.


On May 2 President George W. Bush zoomed off the deck of the aircraft carrier Abraham Lincoln, where he had declared victory in Iraq following a televised landing in a US Navy S-3B Viking jet. A few hours later, Bush landed in California’s Silicon Valley, where he abruptly changed the topic of the day from triumphant war to sputtering economy.

Mindful of the slowdown in what was once a high-tech symbol of US economic might, Bush’s handlers carefully chose his stop in Santa Clara. The President avoided the traditional walk-through at Intel, Cisco Systems or Apple. Instead, as reported by David Sanger of the New York Times, Bush “pulled into the well-protected grounds of United Defense Industries, which produces the Bradley fighting vehicle, tanks and other equipment that became familiar to television viewers watching the 350-mile race to Baghdad last month.”

There, standing before an array of weapons used in Iraq, Bush made his stand for a $550 billion tax cut that Republicans pray will revive investment, cut the deficit and bring back thousands of jobs lost over the past eighteen months. He thanked the assembled United Defense workers for their products, especially the Bradleys, which he boasted “were responsible for a lot of tank kills” in Iraq.

But Sanger, along with every other reporter covering the speech, neglected to mention a crucial fact about United Defense. It is majority-owned and controlled by the Carlyle Group, the Washington, DC, merchant bank in which Bush’s father, George H.W. Bush, has a direct financial interest and serves as a trusted adviser. Yet the American public was kept in the dark about this relationship by the newspaper of record, along with the Washington Post, CNN and every other major media outlet. To people who follow these things, the silence was deafening.

“It’s not irony anymore; its just shameless and brazen,” said Dan Briody, a New York journalist who broke one of the first stories about Bush’s connection to Carlyle. His new book, The Iron Triangle: Inside the Secret World of the Carlyle Group, tells the story of Carlyle’s rise from a lowly buyout firm to the nation’s tenth largest–and arguably most politically connected–military contractor.

“I’ve been amazed at some of these arrangements that have taken place, like the Halliburton situation,” Briody said, referring to the oil services company formerly headed by Vice President Dick Cheney that won a government contract to stamp out oil fires in Iraq. “This Administration keeps making decisions that benefit themselves and their friends, and I don’t see an end to it.” The day we spoke, Representative Henry Waxman released a US Army document disclosing that Halliburton’s no-bid contract was much broader than initially described, and included oil operations and distribution that could increase the cost of the contract to $7 billion.

Briody’s book on Carlyle, published by John Wiley & Sons, is an excellent place to begin understanding the intertwining of business, lobbying and foreign policy that define the twenty-first-century version of the military industrial complex. A key chapter recounts Carlyle’s 1997 acquisition of United Defense for the “fire-sale price” of $850 million and documents how Carlyle spent more than $1.2 million on lobbyists, who roamed Capitol Hill on behalf of United Defense and its weapons systems.

Among Carlyle’s current holdings that Briody lists in an appendix are Composite Structures, which makes metal parts for the AH-64 Apache Helicopter; Lier Siegler Services, which provides logistics support and maintenance for Army vehicles and Air Force jets; and USIS, which performs background checks on millions of government and corporate employees and stands to make a killing in the booming homeland security business.

With Bush preparing the American people for more battles ahead, “it’s more crucial than ever that the press pick up the scent of this story until we make some change,” Briody said. First and foremost, he argued, Bush Sr. should resign from the Carlyle Group “because of the obvious conflict of interest of working for a company that has such huge defense interests while his son is waging these wars.”

Chris Ullman, Carlyle’s vice president for corporate communications, rejected that idea. “Former President Bush’s relationship with his son has nothing to do with Carlyle or our investments,” he said in an e-mail. “The former president does not discuss Carlyle matters with his son; the success of our firm rests on the hard work of our investment professionals.”

As for Briody’s book, Ullman said: “Peel away the layers of factual errors and the self-righteousness and all you’re left with is baseless innuendo. This book should be exposed for what it is, a compilation of recycled conspiracy theories masquerading as investigative journalism.”

That’s something readers can judge for themselves. But does the mainstream press really think the Bush-Carlyle connection is irrelevant? And in the stories about Bush’s speech at United Defense, did it simply fail to note the company’s connection with Carlyle, which can easily be made with a quick search on Google? I put those questions to Sanger on his message machine at the Times’s Washington bureau, but he never returned my call. Maybe next time he’ll get it right.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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